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44 Million VoIP Subscribers In 2010

6/13/2006 09:49:00 AM Eastern

Framingham, Mass. — Residential VoIP service will quadruple its current subscriber base by 2010, according to a new report from research firm IDC.

The report, titled U.S. Residential VoIP Services 2006-2010 Forecast and Analysis: Where There Is Smoke, Is There Fire?, predicts that residential U.S. VoIP subscribers will grow from 10.3 million in 2006 to 44 million in 2010, at which point VoIP will be used in 62 percent of broadband homes.

According to Will Stofega, VoIP Services research manager, the majority of consumers will be using VoIP delivered by cable or telephone companies.

“The sheer economics of it are driving it,” he said. The survival of independent companies like Vonage and 8x8 will depend on how they differentiate themselves in an increasingly competitive market, Stofega added. “If they’re just marketing voice as a stand-alone service, it will be problematic.”

Today, consumer interest in VoIP centers on reducing the phone bill, but future demand will be application-driven, Stofega said, as VoIP delivers more advanced communications features such as enhanced mobility and “on-demand telephony.”

As VoIP usurps traditional landline telephony, the cable and telephone companies will also be insulated from the costs associated with the regulatory requirements that attend “primary line” service to consumer’s homes, Stofega said. Independents like Vonage and 8x8 that bill themselves as “primary line replacements” have to meet requirements such as E911 and wiretapping rules at a greater cost.

“Services like Skype and Jajah that are adjunct services have slipped past the FCC,” Stofega observed.

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